Evidence of that old adage can be found in July's unemployment numbers: the jobless rate fell from 6.4 to 6.2, but the nation suffered 44,000 job losses. How to reconcile seemingly contradictory findings? Well, the jobless rate only includes people actively looking for work. Last month, a ton of them simply gave up.

The number of workers on U.S. payrolls dropped 44,000 -- in contrast to expectations for a rise of 18,000.

"I think it's a little disappointing," said Jay Bryson, economist at Wachovia Securities in Charlotte, North Carolina. "We're not generating job growth in manufacturing, and that's where job losses were concentrated." [...]

The Labor Department's report showed 556,000 people departed the labor force, the biggest drop since May 1995. The labor pool can shrink when job seekers become discouraged and abandon their searches. Unless they are actively searching for a job, workers are not counted as "unemployed."

On the other hand, the consumer price index rose from last month (though those numbers were already rock bottom), and, more importantly, factory activity rose after four months of contraction.

If the economy is growing (and indications are that it is), it's a jobless recovery. Indeed, the economy has had a net loss of over 100,000 jobs the past two months (once again laying waste to Bush's claims that his tax cuts would create jobs).

And while the economy may be kicking into higher gear, it's a recovery dependent almost entirely on defense spending (which shot up 44 percent in Q2). Given that interest rates are inching up (threatening the hot housing market), it's clear that Bush is not out of the woods. Not by a longshot.